[Federal Register Volume 67, Number 87 (Monday, May 6, 2002)]
[Notices]
[Pages 30408-30409]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-11105]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-45840; File No. SR-ISE-2002-08]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change and Amendment Nos. 1 and 2 
Thereto by the International Securities Exchange LLC Relating to Fee 
Changes

April 29, 2002.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on April 15, 2002, the International Securities Exchange LLC (``ISE'' 
or ``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``Commission'') the proposed rule change as described in 
Items I, II, and III below, which Items have been prepared by the ISE. 
On April 23, 2002, the Exchange filed Amendment No. 1 to the proposed 
rule change.\3\ On April 25, 2002, the Exchange filed Amendment No. 2 
to the proposed rule change.\4\ The Commission is publishing this 
notice to solicit comments on the proposed rule change, as amended, 
from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See letter from Michael J. Simmons, Senior Vice President 
and General Counsel, ISE, to Nancy Sanow, Assistant Director, 
Division of Market Regulation (``Division''), Commission, dated 
April 22, 2002 (``Amendment No. 1''). In Amendment No. 1, the ISE 
amended its proposal to extend a waiver for the API Session fee as 
it relates to the Click through May 31, 2003.
    \4\ See letter from Michael J. Simmons, Senior Vice President 
and General Counsel, ISE, to Nancy Sanow, Assistant Director, 
Division, Commission, dated April 23, 2002 (``Amendment No. 2''). In 
Amendment No. 2, the ISE amended its proposal to include reasoning 
for the extended waiver for its API fee associated with Click 
terminals.
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The Exchange proposes three fee changes: (i) an extension of its 
waiver of customer transaction and comparison fees for an additional 
year and one month; (ii) an extension of its waiver of multiple 
``Click'' trading terminal charges for an additional year; and (iii) 
the deletion of Torque trading application fees.
    Below is the text of the proposed rule change. Proposed new 
language is italicized; proposed deletions are in [brackets].
* * * * *

                                              ISE Schedule of Fees
----------------------------------------------------------------------------------------------------------------
        Electronic market place              Amount            Billable unit                  Frequency
----------------------------------------------------------------------------------------------------------------
Execution Fees
 Customer......................           $0.05  contract/side............  Transaction
(Fee waived through June 30, 2003 [May 31, 2002])
 
*                  *                  *                  *                  *                  *
                                                        *
Comparison Fee.........................            0.03  contract/side............  Transaction
(Fee waived for Customer Trades through June 30, 2003 [May 31, 2002])
 
*                  *                  *                  *                  *                  *
                                                        *
Trading Application Software
 
*                  *                  *                  *                  *                  *
                                                        *
    Software License & Maintenance
     [Torque
        First..........................        1,250.00  Terminal.................  Monthly
        Second through Fourth..........          750.00  Terminal.................  Monthly
        Fifth and More.................          250.00  Terminal.................  Monthly]
     Click/Trade Review
     Terminal**
        First through Fifth............          500.00  Terminal.................
        Sixth and More.................          250.00  Terminal.................
    Session/API Fee
     EAM/Trade Review Terminal*
     * *
        First Through Fifth............          250.00  API......................  Monthly
        Sixth and More.................          100.00  API......................  Monthly
 
*                  *                  *                  *                  *                  *
                                                        *
----------------------------------------------------------------------------------------------------------------
** All Click fees for a second and subsequent terminals are waived through May 31, 2003 [May 31, 2002].
  Thereafter, fees are waived for third and subsequent Click terminals (``incremental Click terminals'') if the
  member executes, on average, at least 500 customer or firm proprietary contracts per day per incremental Click
  terminal on the Exchange for the month.

[[Page 30409]]

 
*** All API Session/API fees associated with a second and subsequent Click terminals are waived through May 31,
  2003 [May 31, 2002]. Thereafter, such fees are waived for third and subsequent Session/API associated with an
  incremental Click terminal for EAMs if the member executes, on average, at least 500 customer or firm
  proprietary contracts per day per incremental Click terminal on the Exchange for the month.

* * * * *

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
Sections A, B, and C below, of the most significant aspects of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The ISE proposes to amend three aspects of the its current fee 
schedule. First, the ISE proposes to extend the waiver of customer 
transaction fees. While the ISE currently waives customer transaction 
and comparison fees, this waiver will expire on May 26, 2002. The ISE 
proposes to extend this waiver through June 30, 2003 for competitive 
reasons.
    Second, the ISE proposes to extend the waiver of the Click terminal 
fee and the API fee associated with the use of Click terminals for an 
additional year. ``Clicks'' are ISE order-entry terminals, and the 
waiver applies to a member's second and subsequent Click terminals. By 
its terms, this waiver will expire on May 31, 2002. Because this fee 
waiver has worked well to encourage firms to install and use multiple 
Clicks, the ISE proposes to extend the program for an additional year.
    Third, the ISE proposes to delete the ``Torque'' fees from our fee 
schedule. ISE market makers can use either the Torque application or 
any other application of their choice to support their trading. 
Recently, the ISE ceased to provide Torque directly to market makers. 
Instead, market makers using Torque currently contract directly with 
the supplier of that application, and pay all fees directly to that 
supplier. Thus, the ISE believes that Torque fees are no longer 
relevant and proposes to delete these fees from its fee schedule.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6(b) of the Act,\5\ in general, and 
Section 6(b)(4) of the Act,\6\ in particular, in that it provides for 
the equitable allocation of reasonable dues, fees and other charges 
among its members and other persons using its facilities.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange believes that the proposed rule change does not impose 
any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants or Others

    The Exchange has not solicited, and does not intend to solicit, 
comments on this proposed rule change. The Exchange has not received 
any unsolicited written comments from members or other interested 
parties.

III. Date of Effectiveness of the Proposed Rule Change and Timing 
for Commission Action

    The foregoing rule change, as amended, has become effective as of 
the date of filing of Amendment No. 2, on April 25, 2002, pursuant to 
Section 19(b)(3)(A) \7\ of the Act and subparagraph (f)(2) of Rule 19b-
4 \8\ thereunder because it establishes or changes a due, fee, or other 
charge imposed by the Exchange. At any time within 60 days of the 
filing of such proposed rule change, the Commission may summarily 
abrogate such rule change if it appears to the Commission that such 
action is necessary or appropriate in the public interest, for the 
protection of investors, or otherwise in furtherance of the purposes of 
the Act.\9\
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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4(f)(2).
    \9\ For purposes of calculating the 60-day period within which 
the Commission may summarily abrogate the proposed rule change under 
Section 19(b)(3)(C) of the Act, the Commission considers that period 
to commence on April 25, 2002, the date the ISE filed Amendment No. 
2. See 15 U.S.C. 78s(b)(3)(C).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change, as amended, is consistent with the Act. Persons making written 
submissions should file six copies thereof with the Secretary, 
Securities and Exchange Commission, 450 Fifth Street, NW, Washington, 
DC 20549-0609. Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change, as 
amended, that are filed with the Commission, and all written 
communications relating to the proposed rule change between the 
Commission and any person, other than those that may be withheld from 
the public in accordance with the provisions of 5 U.S.C. 552, will be 
available for inspection and copying in the Commission's Public 
Reference Room. Copies of such filing will also be available for 
inspection and copying at the principal office of the ISE. All 
submissions should refer to File No. SR-ISE-2002-08 and should be 
submitted by May 28, 2002.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-11105 Filed 5-3-02; 8:45 am]
BILLING CODE 8010-01-P